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Lecture Notes in Economics and Mathematical Systems

Investment, R&D, and Long-Run Growth

Authors: Hornung, Dietmar

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About this book

In the 1990s, growth theory has incorporated imperfect competition in its investigations. This innovation has proven to be seminal: Cleviating from growth models with perfect competition, the new framework featured forward­ looking entrepreneurs. Firms maximize profits intertemporarily, i. e. their in­ vestment leads to instantaneous sunk costs and offers flows of future profits. Firms finance this investment by launching shares. The capital market is per­ fectly competitive, implying that the return on a share is equal to the return on a bond. As opposed to the capital market, the goods market is imperfectly competitive. As a result of investment, firms enjoy market power. That is, firms may acquire the capability to provide a product that is differentiated in, e. g. , styling, technology, accessibility, or reputation. The launch of a dif­ ferentiated product allows to capture a market niche, and successful firms may price above marginal cost. The resulting profit flows are channelled to the firms' shareholders. The introduction of monopolistic competition into growth theory is valuable: real world economies may be portrayed rather by such an imperfect competition framework than by a perfect competition approach. Starting with Romer (1990), in growth theory, modeling of imperfect competition has been notoriously bound to a focus on the impact of research and development (R&D) on economic growth. In the existing literature, growth-affecting investment is restricted to R&D investment.

Table of contents (14 chapters)

Table of contents (14 chapters)

Buy this book

eBook $84.99
price for USA in USD
  • ISBN 978-3-642-51718-1
  • Digitally watermarked, DRM-free
  • Included format: EPUB, PDF
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Softcover $109.99
price for USA in USD
  • ISBN 978-3-540-42528-1
  • Free shipping for individuals worldwide
  • Immediate ebook access, if available*, with your print order
  • Usually ready to be dispatched within 3 to 5 business days.
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Bibliographic Information

Bibliographic Information
Book Title
Investment, R&D, and Long-Run Growth
Authors
Series Title
Lecture Notes in Economics and Mathematical Systems
Series Volume
509
Copyright
2002
Publisher
Springer-Verlag Berlin Heidelberg
Copyright Holder
Springer-Verlag Berlin Heidelberg
eBook ISBN
978-3-642-51718-1
DOI
10.1007/978-3-642-51718-1
Softcover ISBN
978-3-540-42528-1
Series ISSN
0075-8442
Edition Number
1
Number of Pages
XVI, 196
Topics

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